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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Tenchusatsu who wrote (39792)	10/21/1998 4:20:00 PM
From: Jim McMannis	Read Replies (1) \| Respond to of 1578880

Ten, RE:"So, Jim, what are the volumes going to be for the K7 after its release? Can AMD produce these K7's in sufficient volume without sacrificing their K6-2 and K6-3 lines? Seems like AMD could find themselves in a dilemma until that Dresden fab cranks up. When will that fab start production anyway, Jim?" --------------- I try to concentrate on the present and very near future. I have no idea (yet, hint) when AMD will start producing the K7 in volume. I do know they've had working silicon since June/July and Motorola has it too. I believe the K7 was targeted for Dresden but I can't say that it won't be produced at FAB 25. Probably will be first produced at San Jose...but what does it matter. You're asking if AMD has the FAB capacity without dresden for the K7? I dunno. When will it crank up? I dunno, yet. Last year at Comdex, AMD showed the K6-2 and intro-ed it in late May, about 6 months later...they will show it at comdex this year in a closed ceremony. Maybe we'll see it in about 6 months. As far as FAB capacity, don't forget Motorola...they have a real hard one on for Intel. Main concern now is that the K6-2-400 gets introduced and the K6-3...gets there too, which right now I'm projecting for mid December. It's important that the K6-3 gets introed at speed grades better than the sweet spot of the K6-2 which by mid-november will be 350MHz. I'm hoping the K6-3 can intro at 350, 400 and 450. Margins? AMDs flagship chips seem to be at about $200 ASP when they are introed or shortly thereafter. Whith a cost of approx $35...that's a pretty good margin. On a side note...there is a code of Pentium II-300 that is supposedly a downbinned 450. Tells me that the demand at the low end is rather significant. Jim

To: Tenchusatsu who wrote (39792)	10/21/1998 5:03:00 PM
From: Maxwell	Read Replies (2) \| Respond to of 1578880

Tenchusatsu: <<Seems like from what you and Maxwell are telling me, AMD is trapped in the sub-$1000 market. They can't transition to higher-performance, higher-margin products or else they'll screw over the OEM's who are milking the dirt-cheap $100 AMD CPUs for all their worth. All this talk about better processes and better CPU designs means nothing if AMD doesn't have the capacity to branch out into new markets.>> Just think about it. How could AMD get ASP up beyond $100? #1 Catch up in speed with Intel. By matching 450MHz to Intel fastest AMD can afford to charge $200-$250 ASP for the 450MHz parts. It is the faster parts that bring the overall ASP up. #2 Come out with faster mobile CPU than Intel. Mobile is a lucrative market but not a huge one compared to desktop. It is not infinitely demand limited from AMD point of view. #3 Offer faster CPU. I doubt very much that the K6-3 will blow Intel PII out of the water. It may beat it by a few percentage points. This is not really enough to charge same price as Intel. The K7 will be faster in speed and performance. This product AMD can match same as Intel highest parts. Conclusion: The K6-3 therefore is not really an attractive products till AMD can get it up at 400Hz and 450MHz and 500MHz. K6-2-350MHz is not really an entry point for desktop but good enough for mobile. This may explain why AMD is delaying the K6-3 till late Q4 and Q1-99. Maxwell